Find out when it is mandatory to pay IMT, who can request exemption, and what special situations are provided for by law when purchasing or transferring real estate.

 

• IMT applies in various situations, such as the purchase of real estate, inheritances, exchanges, or contracts with purchase options.
• There is an exemption for owner-occupied and permanent housing up to certain legal limits.
• The tax may also apply to acquisitions of shares or holdings in real estate funds.
• Knowing the rules and exceptions allows you to better plan the purchase or transfer of a property.

 

Buying a house is a moment of achievement, but also of some concern. There are a few decisions that are not always simple: credit, deeds, taxes. One of the taxes is the IMT (Municipal Tax on Onerous Property Transfers), which can have a considerable impact on the budget.

The truth is that the IMT raises many questions, especially among first-time home buyers. Who must pay it? When are there exemptions? And, after all, how much are we talking about? The rules change depending on the type of property, the purchase price, and even the age of the buyer. Understanding these nuances can mean saving thousands of euros.

Find out when you are required to pay IMT, how to pay it, and in what situations you may be exempt.

 

What is IMT?

IMT (or Municipal Tax on Onerous Property Transfers) is charged by the State whenever there is a transfer of ownership.

In simple terms, IMT is calculated based on the transaction value (or the taxable value, if higher). The amount payable varies according to the type of property, its use (primary or secondary residence) and its location.

Why does this tax exist? The principle is that the acquisition of real estate represents an increase in wealth and should therefore contribute to public revenue. In practical terms, the tax also serves as a means of controlling and registering real estate transactions in the country.

Understanding IMT well can help you save money. There are exemptions, brackets and nuances that make all the difference to the final amount payable.

 

How is IMT calculated?

The starting point is simple: the tax is levied on the higher of the purchase price and the taxable value (VPT) of the property. A progressive rate is applied to this value, which varies according to the nature of the property (urban or rural), its use (own and permanent or secondary residence) and the amount of the transaction.

In the case of own and permanent residences, the first brackets have reduced rates, and there are even situations where the buyer can benefit from total exemption. For second homes or properties intended for rental, the rates are slightly higher, reflecting the investment nature of the property.

 

IMT: when is it mandatory to pay

The rules vary depending on the type of transaction, the value of the property and even the way in which the transaction is carried out.

 

Purchase of permanent residence above the legal limit

If you are buying a house for your own permanent residence, and the property has a taxable value (VPT) or declared value in the deed exceeding €104,261 (on the mainland) or €127,396 (in the Autonomous Regions), payment of IMT is mandatory.

The higher the value of the house, the higher the applicable rate. This means that for properties above this threshold, the tax can represent a significant portion of the investment.

 

Promissory Purchase and Sale Agreement (CPCV)

The CPCV is often used to guarantee the purchase of a property before the deed, but there is a tax detail that deserves attention.

If the buyer has the possibility of transferring their contractual position to another person, the tax authorities consider that there has been a transfer of rights over the property, and therefore IMT is payable.

 

Inheritances with unequal values

In the context of inheritance, IMT may also be mandatory.

When one of the heirs receives a larger share than the others, the difference between the values is considered a transfer for consideration and is therefore subject to tax.

In practice, what is taxed is not the inheritance itself, but the excess value that one of the beneficiaries receives in relation to the others.

 

Property exchange

Property exchanges (known as swaps) are also taxable.

IMT is calculated on the difference in value between the properties exchanged, and there is one important point to bear in mind: if one of the owners sells the property within one year of the exchange, they will have to pay the tax in full within 30 days of the sale.

This is the way the law has found to prevent these exchanges from being used as an indirect means of sale.

 

Lease with option to purchase

Some lease agreements include an option to purchase clause, which is becoming increasingly common. In this case, IMT is due when the tenant becomes the owner of the property.

In addition, if the lease agreement was signed more than 30 years ago, the tax also applies, as it is considered a transfer of ownership.

 

Acquisition of shares in real estate funds

IMT also applies to certain acquisitions of shares in privately subscribed real estate investment funds. This occurs when the properties belonging to the fund are not used for agricultural, industrial or commercial activities, among other specific conditions provided for by law.

In short: even without directly purchasing a property, the investor may be indirectly subject to the tax.

 

Acquisition of shares or quotas

Finally, IMT may also be payable when shares or quotas are acquired in companies with real estate assets.

The rule is simple: if one owner (or two owners who are married or in a civil partnership) holds at least 75% of the shares, it is considered that there has been an indirect transfer of ownership, and the tax applies.

 

IMT exemption: who does not have to pay

There are situations in which the tax may be reduced or even completely waived, depending on the characteristics of the property and the purpose of the purchase.

 

IMT exemption for young people up to 35 years of age

Since 1 August 2024, buyers aged 35 or under who purchase their first permanent home are fully exempt from IMT and Stamp Duty.

To qualify, you must be under 35 and not own any other residential property.

The exemption applies up to €316,772. If the property costs between €316,772 and €633,453, the exemption is partial (only up to the lower limit). Above €633,453, the buyer loses the right to exemption.

If the house is purchased jointly and only one of the buyers meets the requirements, the exemption is reduced to 50%.

 

Renovation works

Anyone who purchases a property with the aim of renovating it can benefit from the exemption, provided that the works begin within six months of the deed and comply with the provisions of Article 45 of the Tax Benefits Statute.

However, this exemption cannot be combined with other benefits, such as the IMI exemption.

 

Purchase for resale

If the property is purchased for resale, it is possible to request an IMT exemption, provided that the sale takes place within a maximum of three years after the purchase.

The buyer can choose to request the exemption at the time of the deed or receive a refund after the resale.

 

Forest intervention zones

The purchase of properties located in forest intervention zones may be exempt from IMT, encouraging the recovery and protection of these areas.

 

Properties classified as heritage

Properties of special national, public or municipal interest, as well as those intended for cultural events or diplomatic missions, are also covered by the exemption.

 

Applying for IMT exemption: how to do it

The process is relatively simple and involves the following steps:

 

1. Confirm whether you need to apply

Not all IMT exemptions require a formal application. In cases of owner-occupied and permanent housing, for example, the exemption is automatic, provided that the property and the buyer meet the legal requirements.

However, in situations such as:

• Acquisition of properties intended for urban regeneration;
• Purchases included in investment projects with special tax status;
• Transfers subject to specific assessment by the Tax Authority.

 

The application must be made in advance, before payment of the IMT, so that the benefit can be recognised in time for the Deed.

 

2. Choose where you want to submit your application

You can apply for IMT exemption in two ways:

• Online, through the Finance Portal, in your personal area, by selecting ‘Submit IMT Exemption Application’.
• In person, at a Finance Service in the area where the property is located.

 

In either case, you must complete IMT Form 1 and attach all documentation proving your right to exemption.

 

3. Gather all the necessary documentation

The documents vary depending on the type of exemption, but usually include:

• Buyer’s identification document;
• Purchase and sale agreement (or draft);
• Permanent certificate or urban property registration document for the property;
• Proof of tax domicile (for own and permanent residence);
• Building permit or renovation certificate, if applicable;
• Other proof of legal eligibility for exemption.

 

Ensure that all documents are up to date and in the buyer’s name so as not to delay the process.

 

4. Wait for the Tax Authority’s response

Once the application has been submitted, the Tax Authority will review the documents and communicate its decision in writing. The response time is usually up to 30 working days.

If the exemption is approved, the buyer will receive confirmation and can proceed with the deed. If further clarification or additional documents are required, you will be notified to complete the process.

 

5. Respond if the application is refused

If the exemption is refused, you can appeal or challenge the decision by submitting new evidence or justifying your application.

These situations are rare when the documentation is complete and the legal criteria are met.

 

When and how to pay IMT

IMT must be paid before the deed is signed or the property is registered.

In practical terms, payment is made immediately after signing the purchase and sale agreement (or the promissory agreement, if possession has already been transferred) and must be proven at the time of signing the Deed.

There is no fixed deadline in days, but the rule is: without proof of payment of IMT, the deed cannot proceed.

The process is relatively simple and can be done in several ways:

• Online, through the Finance Portal, where the buyer can simulate the amount and issue the payment slip.
• In person, at a Finance counter or at an authorised banking institution.
• ATM reference, in some cases, generated after completing the declaration.

 

In any case, you must keep the proof of payment, as it will be required at the time of the deed and will serve as a tax record of the transaction.

To make the payment, you must complete IMT Model 1 Declaration, indicating the details of the property, the seller and the buyer, as well as the transaction amount.

The system automatically calculates the amount due, based on the applicable rates and brackets, and generates the collection document (DUC).

Payment can be made via home banking, ATM, or directly at the counter of the institution where the document was issued.

After payment, you must present proof of settlement at the time of the deed. This document confirms that all tax obligations have been fulfilled and allows the purchase process to be completed without any outstanding issues.

If the payment is made incorrectly (e.g. after the deadline or with incorrect details), the process may be delayed and, in some cases, incur interest or penalties. It is therefore important to check all the details before submitting your declaration.

 

How to save on IMT

Although IMT is a mandatory tax, there are ways to optimise the amount you pay. It is all about knowing the rules well and checking whether your situation allows for any kind of benefit. Here are some points to consider:

 

Check whether the property qualifies as your own permanent residence

This is the most common situation for partial or total exemption. If you are buying a house to live in permanently, confirm that your tax domicile is up to date.

 

Review the taxable value

IMT is calculated based on the higher of the purchase price and the Taxable Asset Value (VPT). If you suspect that the VPT does not reflect the actual value of the property (for example, if it was calculated many years ago), you can request a new assessment from the tax authorities. In some cases, a fair update of the VPT can result in considerable savings.

 

Assess the property’s location

Properties located in urban regeneration areas or included in redevelopment projects may benefit from temporary exemptions or tax reductions. Check whether the municipality where you are buying offers this type of incentive.

 

Analyse the type of transaction

In certain cases, buying through a company or jointly with other owners can change the way the tax is applied. It is important to consult a tax specialist before proceeding, to see if there is a more advantageous structure in your specific case.

 

Plan the timing of the purchase

Annual changes in IMT tables can influence the amount payable. If you are close to a bracket limit, it sometimes makes sense to reassess the timing of the deed in order to benefit from new tax updates.

 

IMT: frequently asked questions

Below are answers to some of the most common questions about IMT.

 

Is it possible to request a refund of IMT?

Yes, in very specific situations. If the transaction does not go through after the tax has been paid, it is possible to request a refund from the Tax Authority, providing proof that the transaction did not take place.

 

What happens if I don’t pay IMT on time?

Late payment of IMT will result in interest and fines. In addition, the property cannot be registered in the buyer’s name until the tax has been paid.

 

Is IMT deductible from income tax?

No. IMT is not deductible from income tax, as it is considered an inherent cost of purchasing the property. However, it can be taken into account for capital gains purposes if the property is sold at a later date.

 

Does the amount of IMT change if the property is in ruins or needs renovation?

No. The tax is calculated based on the taxable value or the value declared in the deed, whichever is higher, regardless of the condition of the property.

 

What if the buyer withdraws after paying the IMT?

If the deal is cancelled before the deed is signed, the buyer can request a refund of the tax. However, it is important to do so within two years of the payment date.

 

Vantage’s properties of excellence

Vantage presents a portfolio of developments designed for those looking for more than just a place to live: a space with soul, comfort and authenticity.

 

Seaside: the charm of the Atlantic in Matosinhos

Living at Seaside means waking up to the light of the Atlantic and feeling the city just around the corner. Located on Rua 1.º de Dezembro, this project reflects the spirit of Matosinhos: a city that has grown without losing its peaceful rhythm and the charm of living by the sea.

The 16 apartments at Seaside were designed for those who value balance: between the sound of the waves and the movement of the streets, between local tradition and modern comfort. It is a space for those looking for a home where time flows naturally, with Porto right next door and the ocean always nearby.

 

Alfredo 63: urban living with a sea view

Alfredo 63 is located in the heart of Matosinhos, in a place where urban life meets the sea breeze. Just a few minutes from the beach and next to the Town Hall, this project was designed for those who like to be close to everything without sacrificing tranquillity.

Its apartments, with balconies and terraces, extend the day outdoors. And the common areas (such as the lounge or the bicycle space) reflect a new way of living in the city: more practical, lighter and more connected to real life.

Lighthouse: coastal serenity

On the iconic Rua Brito Capelo, Lighthouse offers the best of both worlds: the energy of Matosinhos and the serenity of the sea, just 250 metres from the beach.

It is the ideal place for those who value comfort, mobility and an active lifestyle. The interiors reveal an almost artisanal care (with finishes from brands such as Bosch, Silestone, Porcelanosa and Roca) and the common areas, such as the rooftop lounge, the gym and the coworking space, have been designed to make everyday life easier and inspire new routines.

 

Simplify your IMT with Vantage

At Vantage, we know that every purchase is different, and that behind every decision there are dreams, effort and a genuine desire to build something of your own. That’s why we work side by side with our clients to analyse each tax scenario and ensure that the investment is made with complete security and transparency.

If you are thinking of buying a home, explore Vantage’s portfolio of projects. You will find a careful selection of residential and investment properties, where every detail reflects quality, trust and a vision for the future.

Because at Vantage, we believe that buying a home should be a moment of fulfilment, not a maze of doubts. Get in touch.

 

 

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FRANCISCO SIMÕES
CEO & Partner at Vantage Group

Francisco Simões leads Vantage Group with a clear vision: good architecture and quality property development are not a luxury, but a responsibility. With projects in Portugal, he combines strategy, innovation and rigor to create developments that enhance the urban experience and reinforce the value of the communities in which they are located.